Helen of Troy announces poor second quarter

By Simon Pitman

- Last updated on GMT

Related tags Personal care Macroeconomics

Sales are down and profits have been drastically hit for Helen of Troy’s second quarter results as the company’s personal care division feels the pinch.

Overall sales for the quarter were down from $157.92m for the same period last year to $153.54m, a fall of 2.8 percent.

However, breaking the figures down, it was the personal care segment of the business that was hardest hit during the quarter, with sales falling by 10.2 percent to reach $106.40m.

Distorted picture

The company said that the drop in personal care sales was partly explained by the fact that it had introduced its Bed Head product line in the second quarter of 2007, which had pushed up sales for the period on account of initial fill orders.

For this reason, the company said that making a comparison to the previous year’s results made sales figure comparisons difficult because of the distortion created by the Bed Head hair care line.

The blow was softened by the fact that the company’s houseware segment had managed to increase sales significantly, from $39.42m for the second quarter last year, to $47.13m this year, an increase of 19.6 percent.

Proftis significantly down

However, profits for the second quarter were down significantly on last year, falling from $18.25m in 2007 to $10.60m, representing a decrease of 42 percent.

As with the sales performance, the company was also quick to point out that making a direct comparison to last year’s figures was difficult on account of the fact that in the second quarter of last year, profits were positively impacted by a $7.95m tax settlement.

Sales for the full six months increased slightly from $298.01m to $298.45m, while net earnings were down from $28.37m to $16.16m.

But despite the fact that there were several reasons to make comparisons with last year’s results difficult, CEO Gerald Rubin conceded that economic conditions are making things difficult.

Retail environment challenging

“The present retail environment continues to remain extremely challenging,”​ he said. “Many of our retail customers continue to experience a slowing sales environment as enter the critical fall and holiday sales seasons.”

Rubin went on to explain that consumer spending in the US mass market channel is likely to be significantly impacted by both macro economic factors and rising costs.

However, he also added that the company’s plan to step up new product offerings, striving for increased market share and continued efforts to increase processing efficiencies were likely to put the company in a strong position to tackle the current conditions.

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